Trump's Tariff Threat: A Shake-Up for India-Iran Trade

The announcement by US President Donald Trump of a 25% tariff on countries trading with Iran looms over Indian exporters, who are already affected by a 50% US tariff. India's trade with Iran is significant, with major exports including rice and pharmaceuticals. Clarifications are eagerly awaited.

In the wake of US President Donald Trump's recent declaration of a 25% tariff on nations engaging in trade with Iran, apprehensions are rising among Indian exporters. While the specific impacts remain uncertain, the announcement could potentially deal a blow to Iran's pivotal trading partners, including India.

The Federation of Indian Export Organisations (FIEO) has emphasized the compliance of Indian businesses with existing sanctions, focusing on humanitarian trade, particularly in food and pharmaceuticals. Still, clarity on the new US policy is in high demand among exporters.

India's economic ties with Iran are robust, featuring prominent exports such as rice and tea. However, US-imposed tariffs add a layer of complexity. In 2024-25, India's exports to Iran increased marginally by 1.55% to USD 1.24 billion, while imports shrank by 29.32% to USD 441.83 million.

(With inputs from agencies.)